How to Correctly Void a Check in QuickBooks
Hint: It’s not on the Edit menu
This is an area of QuickBooks that seems to generate more mistakes than almost any other.
QuickBooks provides a command, located on the Edit menu, to void a transaction. When this command is used, the transaction amount is changed to zero. A memo is added indicating the transaction has been voided.
But it is an edit. That is, the transaction retains its original date. The amount just changes to zero.
The problem with this solution is the impact on older transactions being voided.
Assume a company’s bookkeeping is complete, financial statements have been printed, perhaps given to a bank, and a tax return filed.
Then, it is decided something needs to be done about the old checks that won’t clear the bank. They are listed as outstanding on the bank reconciliations, perhaps the check dates are year or more old.
So, the checks in QuickBooks are voided. The result? Besides voiding the checks, the previously issued financial statements are incorrect and the filed tax return is now incorrect.
Voiding a check in a current period causes few issues. It can be located in the check register or on any report. Double click on the line with the check in order to view it. Then, from the edit menu or the Delete icon of the transaction ribbon, choose Void Check.
It might be a good idea to add a note of explanation in the memo field of the check. Then Save and Close to record the transaction. Since the check was originally written in the current period, prior account balances are not affected.
Voiding Checks From Prior Periods
This is the more common situation and a task that must be handled with more care. The first step is the same. Find the check to be voided either in the account register or on a QuickBooks report.
Double click on the entry to view the check. In the memo field of the check make a note that the check is being voided with a deposit entry as of a current date.
Do not void the check with the QuickBooks Void command. Only note in the memo field that the check will be voided, and on what date.
Using a current date, create a Deposit in QuickBooks. The Name column can be left blank.
In the Account column, use the same expense account as was used on the original check. In the Memo column explain that check #XXX from (original date of the check), is being voided by this deposit. In the Amount column, use the amount of the check being voided.
The next and final step will be when the bank account is next reconciled.
The old check will still be there, but so will the new deposit. Check off both even though they are not on the bank statement. They are the same amount so will net to zero and not affect your bank reconciliation.